STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

LARRY MCCARTY, )

)

Petitioner, )

)

vs. ) CASE NO. 90-5311BID

) STATE OF FLORIDA, DEPARTMENT ) OF CORRECTIONS, )

)

Respondent, )

and )

) THE FEARN PARTNERSHIP, INC., )

)

Intervenor. )

)

RECOMMENDATION

Pursuant to notice, the Division of Administrative Hearings by its duly designated Hearing Officer, William R. Cave, held a formal hearing in the above- captioned case on October 16, 1990 in Tampa, Florida.

APPEARANCES

For Petitioner: Robert H. Grizzard, Esquire

Post Office Box 992 Lakeland, Florida 33802

For Respondent: Steven S. Ferst, Esquire

Department of Corrections 2601 Blairstone Road

Tallahassee, Florida 32399-2500

For Intervenor: David A. Fearn, President

As Qualified Representative The Fearn Partnership, Inc. Suite 801, The Marble Arcade

129 South Kentucky Avenue Lakeland, Florida 33801

STATEMENT OF THE ISSUES

Whether Respondent's determination that the bid submitted by Petitioner was non-responsive, was arbitrary, capricious, or beyond Respondent's scope of discretion as a state agency.

PRELIMINARY STATEMENT

This hearing involves the award of a lease contract by Respondent, Department of Corrections (Department) pursuant to a Request For Proposal and Bid Proposal Submittal Form (BID), for Lease No. 700:0556. The lease contract was initially awarded to Petitioner, Larry McCarty (McCarty) because, in addition to finding the McCarty proposal responsive, the Department awarded the McCarty proposal the highest evaluation score. A protest challenging the award was filed by the Intervenor, The Fearn Partnership, Inc. (Fearn). Subsequent to the protest, and before McCarty intervened or a hearing was held, the Department rejected its award of the lease contract to McCarty and awarded the lease contract to Fearn since its bid was determined to be responsive and it had received the next highest evaluation score after McCarty. The bid submitted by McCarty was rejected by the Department as being non-responsive because McCarty proposed to lease more square feet of space than requested in the BID and the BID was not signed by all owners of the property proposed to be leased. By letter dated July 31, 1990 the Department advised McCarty that his bid had been rejected and, further advised him of his right to a formal administrative hearing. McCarty requested a hearing and this proceeding ensued.

At the hearing, Petitioner testified on his own behalf and presented the testimony of Beth Novak, Adrian Gabaldon and Joseph Papy. Petitioner's exhibits one through six were received into evidence. The Respondent presented the testimony of Beth Novak and Donald Waldron. Respondent's exhibits one and two were received into evidence. The Intervenor offered no testimony or exhibits.

The transcript of this proceeding was filed with the Division of Administrative Hearings on October 26, 1990. By stipulation the parties waived the time frame as to the final hearing and the Recommended Order imposed by Section 120.53(5)(e), Florida Statutes. The parties timely filed their Proposed Findings of Fact and Conclusions of Law in accordance with the stipulation. A ruling on each proposed finding of fact has been made as reflected in an Appendix to the Recommended Order.

FINDINGS OF FACT

Upon consideration of the oral and documentary evidence adduced at the formal hearing, the following relevant facts are made: A. Background

1. The Department issued a Request For Proposal and Bid Submittal Form (BID) for a full service lease, Lease Number 700:0556, seeking to rent office space in an existing facility located in Polk County, Florida.

   
   

2. Responses to the BID were to be filed with the Department by 10:00 a.m. on June 12, 1990.

   
   

3. Six proposals were timely submitted in response to the BID, including McCarty's and Fearn's proposal.

   
   

4. The Department evaluated the six proposals and made site visits to the properties proposed to be leased.

   
   

5. The McCarty proposal received the highest evaluation score of 95.4 points, while the Fearn proposal received the second highest evaluation score of

   92.6 points.

6. Because the McCarty proposal had been found responsive to the BID and received the highest evaluation score, the Department awarded the lease contract for Lease No. 700:0556 to McCarty.

   
   

7. Fearn filed a timely protest challenging the award to McCarty.

   
   

8. The Fearn protest was referred to the Division of Administrative Hearings for hearing. However, after the protest was referred to the Division of Administrative Hearings but before McCarty could intervene or a hearing could be held, the Department reviewed the McCarty proposal and found it to be non- responsive.

   
   

9. The Department determined that the McCarty proposal was non-responsive because the McCarty proposal was for more space than authorized by the BID and that not all owners of the property proposed to be leased signed the BID.

   
   

10. After determining that the McCarty proposal was non-responsive, the Department rejected the McCarty proposal and awarded the lease contract for Lease No. 700:0556 to Fearn. Upon Fearn withdrawing its protest, the Division of Administrative Hearings closed its file by relinquishing jurisdiction to the Department and the Department entered a Final Order dismissing the Fearn protest.

    
    

11. By letter dated July 31, 1990, the Department advised McCarty of its decision to reject his proposal as non- responsive and award the bid to Fearn. By this same letter, the Department advised McCarty of his right to file a protest and his right to a formal administrative hearing. B. Lease Space Requirement

    
    

12. Prior to issuing the BID the Department submitted to the Department of General Services (DGS) a Request For Prior Approval of Space Need (BPM Form 4405) wherein the Department justified, through a Letter of Agency Staffing, the need for 3,108 square feet of office space to be located in an existing facility in Auburndale, Polk County, Florida. However, the Department requested approval of only 3,017 net square feet. DGS approved the request for 3,017 net square feet of space and the Department issued the BID referred to in Finding of Fact l.

    
    

13. The BID requested bidders to submit proposals to lease 3,017 square feet (plus or minus 3%) measured in accordance with Standard Method of Space Measurement and advised the bidder that the space offered must be within the plus or minus three percent required.

    
    

14. The maximum square footage requested by the BID was 3,108 square feet (3017 + 3%). The McCarty proposal was for 3,150 square feet or 42 square feet over the maximum requested.

    
    

15. The Department was aware of, and considered, the square feet of rental space proposed by each response to the BID in the initial evaluation since it rejected two proposals for exceeding this requirement by 145 and 392 square feet, respectively. The Department apparently considered the excess 42 square feet of space in the McCarty proposal in its initial evaluation but through an oversight failed to reject the McCarty proposal as it had in the other two proposals.

16. Upon the Fearn protest being filed the Department's legal office reviewed the McCarty proposal and determined that the excess 42 square feet of space was a deviation that should not have been waived. At this point, the McCarty proposal was found to be non-responsive.

    
    

17. The price per square foot of the McCarty proposal in all years, one through five, was less than the Fearn proposal.

    
    

18. The total price of the lease in the McCarty proposal, including the excess 42 square feet, in all years, one through five, was less than the Fearn proposal.

    
    

19. There was no evidence that the cost of the McCarty proposal would exceed the amount budgeted by the Department for this lease. C. Signature of Owner(s) and Transfer of Ownership Requirements.

    
    

20. At the time McCarty signed and submitted the BID he was co-owner of the property bid with Adrian Gabaldon.

    
    

21. Gabaldon was aware that McCarty was offering the property in question for lease to the Department having witnessed McCarty's signature on the BID and having been involved with the Department personnel concerning the BID.

    
    

22. Section D. 4. A, General Provision, page 8 of the BID provides in pertinent part:

    
    

    Each proposal shall be signed by the owner,(s), corporate officer(s), or legal representative(s). The corporate, trade, or partnership title must be either stamped or typewritten beside the actual signature(s). If the Bid Submittal is signed by an agent, written evidence from the owner of record of his/her authority must accompany the proposal

    
    

23. McCarty's signature was the only signature, as owner, appearing on the McCarty proposal. Below McCarty's signature the word "owner" was handwritten.

    
    

24. Gabaldon signed the McCarty proposal as a witness to McCarty's signature and not as an owner.

    
    

25. There is insufficient evidence to establish that at the time McCarty submitted his proposal the property bid was owned by a partnership consisting of McCarty and Gabaldon.

    
    

26. There is no printed or typewritten partnership name in the vicinity of McCarty's signature in his proposal or anywhere else in his proposal.

    
    

27. Sometime between the date McCarty submitted his BID and the date of the hearing, Gabaldon transferred his interest in the property bid to McCarty.

    D. General

    
    

28. By signing the BID, McCarty agreed to comply with all terms and conditions of the BID and certified his understanding of those terms and conditions.

29. In accordance with Section D.10., General Provisions, page 9 of the BID, all question concerning the specifications were to be directed to C. Donald Waldron. And, although McCarty or Gabaldon may have discussed the space requirement and other matters with certain employees of the Department, they knew, or should have known, that these questions should have been directed to Waldron. Otherwise, the answer could not be relied upon.

    
    

30. Neither McCarty or Gabaldon ever contacted Waldron concerning the terms, conditions or specifications of the BID and, more specifically, concerning the space requirement or who was required to sign the BID.

    
    

31. Submitted with the Fearn proposal was a letter from Entrepreneur of Tampa as owner of the property bid in the Fearn proposal appointing David Fearn, CCIM and The Fearn Partnership, Inc. as its agent to submit a proposal on behalf of Entrepreneur of Tampa.

    
    

    CONCLUSIONS OF LAW

    
    

32. The Division of Administrative Hearings has jurisdiction over the parties to, and the subject matter of, this proceeding. Section 120.57(1), Florida Statutes.

    
    

33. An agency has wide discretion in awarding contracts to responsible bidders, and its exercise of that discretion will not be overturned unless it is arbitrary or capricious, or evidences the agency's bad faith. Department of Transportation v. Groves-Watkins Contractors, 530 So.2d 912, 914 (Fla. 1988); Baxter's Asphalt and Concrete, Inc. v. Department of Transportation, 475 So.2d 1284 (Fla. 1st DCA 1985); Capelletti Brothers v. Department of General Services,

    432 So.2d 1359 (Fla. 1st DCA 1983); Liberty County v. Baxter's Asphalt and Concrete, Inc., 421 So.2d 505 (Fla. 1982); Wood-Hopkins Contracting Co. v. Roger

    J. Au and Son, Inc., 354 So.2d 446 (Fla. 1st DCA 1978). Agencies do not have unbridled discretion, however, and must act in a reasonable manner in the award of contracts. Couch Construction Co. v. Department of Transportation, 361 So.2d 172, 175 (Fla. 1st DCA 1978).

    
    

34. In accordance with Section 455(2)(a), Florida Statutes, the Department sought and received approval to lease 3,017 net square feet of space based on a justified need for 3,108 net square feet. And, while Rule 13M-1.015(2)(b) and (3)(b), Florida Administrative Code, provides for the solicitation and the specifications to deal in approximations of square footage, the BID placed an upper and lower limit on the approved net square footage of a plus or minus three percent. These limits are set forth in the DGS Form BPM 4136, incorporated by reference in Rule 13M-1.015(3)(e), Florida Administrative Code, and used by the Department the in solicitation of the bid proposals. Therefore, the Department is bound by these limitations, particularly since the upper limit (3017 + 3%) is the net square footage (3,108) justified by the Department in its Letter of Agency Staffing submitted with its request for prior approval. McCarty's proposal to lease more space than was justified or allowed by the BID is a deviation that cannot be waived.

    
    

35. Likewise, the failure of all owners to execute the BID as required therein is a deviation that cannot be waived. However, assuming arguendo that the property was owned by a partnership, the failure to indicate such partnership as required by the BID is a deviation that cannot be waived.

36. While it is unfortunate that the Department did not discover its error in awarding the bid to McCarty until the Fearn protest, there is no evidence that the Department has acted arbitrarily or capriciously or in bad faith by rejecting the McCarty proposal as being non-responsive even after its initial award of the BID to McCarty.

RECOMMENDATION

Based on the foregoing it is recommended that the Department enter a Final Order dismissing McCarty's protest and awarding lease number 700:0556 to Fearn.

DONE and ENTERED this 3rd day of January, 1991, in Tallahassee, Florida.

WILLIAM R. CAVE

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, FL 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 3rd day of January, 1991.

APPENDIX TO THE RECOMMENDED ORDER CASE NO. 90-5311BID

The following constitutes my specific rulings pursuant to Sections 120.59(2), Florida Statutes, on the Proposed Findings of Fact submitted by the parties in this case.

Specific Rulings on Proposed Findings of Fact Submitted by Petitioner

1. Stipulated Facts

   1- 11. Adopted in Findings of Fact 1, 2, 3, 4, 5, 5,

   6, 8, 9, 14 and 20, respectively.

   
   

2. Petitioner's Proposed Additional Findings

   1. Adopted in Finding of Fact 24.

   2. - 3. Not relevant or material

1. Adopted in Findings of Fact 6 and 15.

2. Not supported by substantial competent evidence in the record.

3. Adopted in Findings of Fact 18 and 19.

4. Adopted in Finding of Fact 10, but modified.

5. Adopted in Findings of Fact8 and 10, but modified.

6. Adopted in Findings of Fact 6 and 10, but modified.

7. Not supported by substantial competent evidence in the record but in Finding of Fact 29.

8. By rule ownership has to be disclosed by successful bidder only but all owners have to sign bid proposal.

9. Not supported by substantial competent evidence; see Rule 13M- 1.015(3)(c) incorporating by reference Form BPM 4136.

   Specific Rulings on Proposed Findings of Facts Submitted by Respondent

   
   

   1 - 12. Adopted in Findings of Fact 1, 2, 3, 4, 5, 5, 6, 7, 8, 8, 8, and 9, respectively.

10. Adopted in Findings of Fact 8 and 10.

11. - 26. Adopted in Findings of Fact 10, 19, 19, 11, 14, 14, 14, 14, 15, 15, 16, 5, and 19, respectively.

27. - 30. Adopted in Finding of Fact 12.

1. Adopted in Finding of Fact 14.

2. - 33. Not material or relevant.

34. - 35. Not necessary.

1. Not material or relevant.

2. First sentence not relevant or material. Second sentence not necessary.

3. - 39. Not necessary.

40. - 43. Adopted in Findings of Fact 29 and 30.

1. See conclusions of law.

2. - 46. Adopted in Finding of Fact 28.

47. - 51. Adopted in Findings of Fact 20, 27, 22, 23 and 24, respectively.

1. Restatement of testimony, not a finding of fact, but see Finding of Fact 25.

2. - 55. Adopted in Findings of Fact 22, 26 and 28, respectively.

1. Restatement of testimony, not a finding of fact, but see Finding of Fact 29.

2. - 61. Adopted in Findings of Fact 31, 22, 22, 31, and 31, respectively.

62. Not necessary.

Specific Rulings on Proposed Finding of Fact Submitted by Intervenor

1. Adopted in Finding of Fact 9.

2. - 3. Not material or relevant; also not supported by substantial competent evidence.

1. Not material or relevant.

2. Adopted in Finding of Fact 15 but modified.

3. - 7. More of a conclusion than a Finding of Fact.

8. Not material or relevant.

COPIES FURNISHED:

David A. Fearn, President The Fearn Partnership, Inc. Suite 801, The Marble Arcade

129 S. Kentucky Avenue Lakeland, FL 33801

Steven S. Ferst, Esquire Department of Corrections 2601 Blairstone Road

Tallahassee, FL 32399-2500

Robert H. Grizzard, II, Esquire

P.O. Box 992 Lakeland, FL 33802

Richard L. Dugger, Secretary Department of Corrections 1311 Winewood Boulevard

Tallahassee, FL 32399-2500

Louis A. Vargas, General Counsel Department of Corrections

1311 Winewood Boulevard

Tallahassee, FL 32399-2500

Docket for Case No: 90-005311BID

Orders for Case No: 90-005311BID